The USPS Requests an Advisory Opinion


The formal document that initiates the process for an Advisory Opinion comes from the Postal Service, and it’s called “Request of the United States Postal Service for an Advisory Opinion
on Changes in the Nature of Postal Services,” and it’s dated July 27, 2011.

[The original document is here.]

The Request, as we’ll call it here, acknowledges that postal patrons accustomed to obtaining products and services at one location will experience a change in service by virtue of having to obtain them at another nearby postal retail facility or an alternate postal retail access channel. 

The Request states, “No facility closure or service change resulting from this Initiative will be implemented before late December, 2011.”  However, as we shall see, this does not mean that the Postal Service is going to wait for the Advisory Opinion before proceeding.  It is already initiating the discontinuance process on the RAOI post offices, and there are likely to be post offices closing before the end of the year.

Objectives and Goals of the RAO Initiative

The Request reviews relevant statutes, including the key passage in 39 U.S.C. (Title 39), which states: “The Postal Service has been established to operate as a basic and fundamental service to the American public that binds the Nation together through the personal, educational, literary, and business correspondence of the people.  Management of the national postal system involves the balancing of important service, operational and financial objectives, including the provision of adequate, prompt, reliable, and efficient services to all communities. A maximum degree of effective and regular service is to be provided to rural areas, communities and small towns where post offices are not self-sustaining. No small Post Office is to be closed solely for operating at a deficit.  The Postal Service is responsible for operating and maintaining such facilities and equipment as are necessary to pursue these objectives.”

The Request proceeds to add, however, that Congress also has directed the Postal Service to expand and promote a mix of alternative postal retail access channels. (This is a reference to Postal Accountability and Enhancement Act § 302(d), which, as anticipated on the pages of this website some time ago, may turn out to be a crucial passage in the arguments that will unfold over the coming weeks.)

The Postal Services notes that “postal customers have responded to the expansion of alternative channels for access to retail postal products and services by using them to conduct an ever-growing proportion of their postal transactions. The objective of the RAO Initiative is to evaluate certain categories of facilities within the postal retail network to determine whether their numbers can be reduced while the Postal Service still ‘maintain[s] postal facilities of such character and in such locations, that postal patrons throughout the Nation will, consistent with reasonable economies of postal operations, have ready access to essential postal services.39 U.S.C. § 403(b)(3).’”

The goals of the RAOI are as follows:

  • evaluate the level of earned workload, customer demand, and/or availability of alternatives of a retail facility in determining whether it should be studied for discontinuance;
  • apply revised discontinuance rules to locally-initiated discontinuance actions already in progress that have not advanced to the community meeting stage;
  • improve efficiency and enhance customer convenience in the provision of retail services through the use of alternate access; and
  • capture the resulting cost savings if a determination is made to close a postal retail facility.

The Postal Service explains that post offices are no longer the sole means by which postal customer retail transactions may occur. The Postal Service has created a wide range of tools by which it can extend service beyond traditional "brick and mortar" postal retail facilities. 

The Postal Service is also introducing the concept of a “Village Post Office,” a contractor-operated retail unit at which customers will be able to purchase stamps and pre-paid Flat Rate packaging.  “Collectively, these alternatives extend, facilitate, and often expedite customer access to retail postal transactions that once required a visit to a retail window during specified hours at a Post Office, station or branch.”

Scope of the RAO Initiative

The Request proceeds to describe the scope of the RAO initiative.  There are 26,880 Post Offices and approximately 5,610 stations and branches in the United States.  There are 3,532 facilities included in the RAO initiative:

  1. 2825 Post Offices with low earned workload and no greater than $27,500 in total annual revenue;
  2. 384 stations and branches that earned fiscal year 2010 (FY) revenue of less than $600,000, that had FY 2010 revenue less than the average for FYs 2008 and 2009, and that are located within two miles of at least five postal retail and/or alternate access sites;
  3. 178 retail annexes that had FY 2010 revenue of less than $1 million and are located within a half-mile of at least five postal retail and/or alternate access sites;
  4. 265 Post Offices, stations, and branches that were undergoing locally-initiated discontinuance review independently of RAO at the time of the Postal Service's recent amendment to its retail facility closing regulations, but had not advanced to the community meeting stage of the review process.

This last group is included in the Initiative in order to ensure consistency with the rest of the facilities, so they will all fall under the new procedures in Handbook PO-1018 (effective July 14, 2011). 

The Recently Amended Discontinuance Procedures Will Be Employed

The new procedures for discontinuance are largely a response to criticisms made about the closing process in the PRC Advisory Opinion on the Stations and Branches Optimization Initiative of a couple of years ago.  Now the Postal Service will ensure that customers are given adequate notice that their post office may close.  The new rules identify several factors in making determinations to close or consolidate a post office, including the effects on the community and employees, economic savings, the policy in section 101(b) that it provide a maximum degree of effective and regular postal services where post offices are not self-sustaining, and such other factors as the Postal Service determines are necessary.

The changes in the procedures include the following:

1. Top-down process: Under previous regulations, the Postal Service exclusively used a “bottom-up” process to identify Post Offices for possible discontinuance. Under the new rule, Postal Service Headquarters management can also identify candidate offices for initial feasibility studies, thereby making clear the possibility of a “top-down” approach to initial stages of the process for post offices in addition to the former “bottom-up” approach. This measure is intended to improve consistency of decision-making.

2. Factors to Trigger an Initial Feasibility Study: The factors include earned workload below the minimum established level for the lowest non-bargaining (EAS) employee grade; insufficient customer demand; and the availability of alternate access channels. These factors only inform whether the initiation of a study is warranted; they do not modify legal requirements for justifying an ultimate decision on whether to close or consolidate a facility.

3. Process Management: The new rule “improves” the discontinuance process by removing steps such as waiting periods at the end of the discontinuance process, removing requirements for internal circulation of hard-copy documents, and facilitating efficiency of the decision-making process through utilization of internal web- based operating data access and review.  (In other words, it streamlines the process and speeds it up.)

4. Station and Branch Discontinuance: Until issuance of the final rule on July 14, 2011, the Postal Service had not subjected stations and branches to the same public notice and comment periods that have long applied to Post Office discontinuance. Rather, the procedures for stations and branches were more abbreviated. The final rule erases virtually all of these differences and now applies the same time posting periods and community input procedures to stations and branches.

The closing process has already begun

The Postal Service is not waiting to hear the Advisory Opinion before it begins the closing process on these 3,650 post offices.  As of July 27, 2011, headquarters has instructed local postal managers to begin initial feasibility studies of RAO candidate retail facilities within their geographic areas of responsibility. Some “subset” of this list will be identified for further consideration, but “it is premature at this time to estimate the size of this subset.”

The Postal Service anticipates that field personnel will initiate discontinuance actions that are part of the RAO Initiative serially, on a minimum ten-week rolling period beginning from July 26, 2011.

The Request proceeds to point out that just because the discontinuance process has begun for a facility does not mean it will close.  Moreover, service does not actually change until the post office closes, and the post offices won’t start closing until after the PRC issues its Opinion.

The local 60-day public notices announcing the discontinuance of particular facilities are expected to be issued beginning in late October and into late December 2011.  At the end of the 60 days, if no appeal is filed, the post office can be closed, so post offices could start closing as early as late December.

The Request clarifies that all of this does not apply to the facilities already begun for discontinuance on an “ad hoc basis,” i.e., those being closed when the plan was there was no plan.  These post offices can be closed while the PRC is working on its Opinion.

Additional Materials

There are five items included in the initial Request [the official list is here]:

  1. United States Postal Service Handbook PO-101 (July 2011) [document here]
  2. Retail Access Optimization Initiative Discontinuance Candidate Facility List
  3. List of Retail Facilities Undergoing Discontinuance Review Outside the Scope of the RAO Initiative
  4. Nonpublic Material Related to Postal Location “Nearest- Neighbor” Calculation and Results
  5. Nonpublic Material Related to Revenue Distribution and Single Stamp Sale Analyses

The Handbook is already an issue, since it incorporates some procedural changes that have been challenged by NAPUS, and the PRC has not ruled on that issue.  Two changes, concerning the meaning of consolidation and the policy that a post office must have a postmaster, have been deferred.  

(The RAOI list itself does not seem to be properly presented in the docket.  The Nearest-Neighbor location material is very interesting, andit's discussed here.  The Revenue Distribution and Single Stamp Sale documents are not available to the public, and this has already become an issue; a request has been made to make them public — more here.)